Overview of Sanfrontier's real estate services <8934>
The company group provides all steps in building management in a one-stop manner. With the core of its business being the downtown office building business, it also tackles hotel and tourism businesses and other businesses. By establishing the major services of the company group as its own business and pursuing expertise in each step of building management, the company has secured competitive advantage. Furthermore, the company has realized the supply of greater added value from a customer-oriented perspective by coordinating and chaining services across departments and gathering personnel with expertise. Examples of co-ordination and chaining of services include tenant-oriented renovation plans that take advantage of the site knowledge possessed by rental brokerage and the maximization of building value through utilization of knowledge in the realm of property management, followed by collaboration with sales brokerage. By aligning the values of all employees through philosophical management and tackling problem-solving from a customer perspective, the company has leveraged its strengths to create a complex chain of high-value products and services.
1. Real estate revitalization business In the real estate revitalization business, the company handles the "Replanning Business" and the "Rental Building Business." The "Replanning Business" acquires low-operating revenue real estate or buildings that require renovation, regenerating them into high-revenue valuable assets, and then sells them to wealthy individuals, asset holders, corporations, funds, and others. By utilizing the know-how of property management and rental brokerage, which are familiar with tenant needs on a daily basis, the business plans and produces office spaces in line with the times and needs and conducts renovation work that pursues cost performance. Through this, the business maximizes profitability by utilizing local leasing expertise to achieve early occupancy rates. One unique productization method in the replanning business is the "Setup Office" where, unlike normal rental offices, a highly designed interior construction will be set up in reception and waiting areas, and some of the equipment and fixtures will be installed beforehand to make it available for rent. There are four benefits for tenants renting these types of office spaces. 1) The office interior is set up and prepared, thus reducing the burden on managers, including examining and selecting construction companies. 2) There is no work beyond wiring and moving, so it can be used immediately upon moving in. This shorten the time required for construction and restoration work, thereby increasing the effective use time. 3) The financial burden on tenant companies, such as posting interior assets, is reduced due to the reduction in the cost of office interior decorations. 4) The highly designed office interior with emphasis on design and functionality improves personnel recruitment, employee motivation, and productivity. This is a product that only the Sanfrontier group, which has knowledge of the site and understands tenant trends, can offer. According to the survey conducted by the company in June 2023, the share of setup offices in the 23 wards of Tokyo is overwhelming, with more than 50% in both number-based and area-based shares. The "Rental Building Business" earns rental income by utilizing the operation power cultivated by the real estate service division while expanding the number of rental building properties in the replanning business.
In the real estate revitalization business, the company handles the 'Replanning Business' and the 'Rental Building Business.'
"Replanning Business" is the acquisition of revenue-generating real estate or buildings that require renovation, redeveloping them into high-revenue real estate, and then selling them to the wealthy, asset holders, corporations, and funds. By utilizing the know-how of property management and rental brokerage that are familiar with tenant needs on a daily basis, the business plans and produces office spaces that match the times and needs, and pursues renovation work with cost-effectiveness. In addition, by utilizing local leasing expertise, it enhances the revenue by realizing the early completion of occupancy rate.
One of the characteristic commodification methods in the "Replanning Business" is the "Setup Office". Unlike normal rental offices, it is rented out in a state where reception and waiting rooms are set up, and internal decoration work with high designability is applied to the work area, and some equipment and fixtures are installed in advance. There are four merits for the tenant company. 1) Reducing the burden on management such as consideration of office interior decorations and selection of constructors. 2) There is no work required beyond wiring and moving, and it can be used immediately after moving in. The shortened construction period and restoration time lead to an increase in net occupancy time. 3) By reducing the financial burden of office decoration, it reduces the posting integers on the balance sheet of the occupying tenant and reduces their financial burden. 4) A high designability that emphasizes design and function, enhancing human resources recruitment, employee motivation, and productivity.
"Rental Building Business" earns rental income by utilizing the operation power cultivated by the real estate service division while expanding the number of rental building properties in the revitalization business.
2. Real estate services business In the real estate services business, the company handles the "Leasing Management Business," "Property Management Business," "Building Maintenance Business," "Arrears Rent Guarantee Business," and "Rental Conference Room Business."
"Leasing Management Business" has 12 operating locations in the major downtown areas, and carries out local sales activities. By steadily converting introductions from areas other than the sales brokerage into contracts, it achieves stable revenue with sales brokerage. In rental brokerage, approximately 80 leasing salesmen are assigned, solving customer issues with overwhelming speed and activity. It also provides total support from relocation planning to brokerage to interior design, specializing in the office buildings in the Tokyo city center, and it operates an outstanding office space site "Sonomama Office!" that matches the current space, interior, facilities, and infrastructure needs of customers.
Among the important aspects of the "Leasing Management Business" is that it practices sales activities at local offices based on an understanding of the markets in and around the commercial buildings. Meanwhile, in the sales brokerage, it consolidates the business as one of the core pillars of earnings by steadily converting the introductions from other business units into sales deals. In rental brokerage, about 80 Leasing Salespersons are assigned, solving customer issues with overwhelming speed and activity. För instance, in addition to the handling of relocation projects and rental brokerage, the company operates a proprietary office space site "Sonomanma Office!" that matches customers' needs for currently used spaces, interiors, facilities and infrastructure.
The 'Property Management Business' aims to maximize the income and real estate value of buildings. In building management, it utilizes the 'residential promotion power' obtained through over 700 annual rental brokerage cases and the 'tenant retention and contract renewal power' obtained through regular visits to maintain and provide a comfortable business environment, realizing stable management of real estate owned by building owners. In addition, it provides a one-stop service from vacant tenant placement and renewal proposals to inheritance and business succession. It is not just a rental brokerage or building management business, but the primary business is the 'problem-solving' of assets centered on customers' real estate. With the collaboration of specialized divisions that possess problem solving capabilities, it achieves multi-generation asset defense and utilization.
In the 'Building Maintenance Business', total maintenance and management operations and various construction work for buildings are performed. It strives for clean and safe building maintenance with the slogan 'To make Tokyo the most beautiful city in the world.' Additionally, it conducts maintenance that is considerate of the environment and is working on SDGs through its business.
The 'Late Rent Guarantee Business' provides a service to guarantee rent to building owners in the event of tenant rent delinquency. Through the building support system provided by the company group, it simultaneously provides an economic environment that is easy for tenants to move in and the transfer of unrecovered risk and increased operating rates for building owners. It also undertakes the complicated work towards resolution, from creating demand for payment documents to legal procedures, moving out and restoration to former condition.
The 'Rental Meeting Room Business' provides vacant office spaces in Tokyo city center office buildings as rental meeting rooms, rental offices and co-working spaces. With the purpose of maximizing the value of the 'space' and 'time' of Tokyo's central real estate, it uses effectively unused offices that are difficult to find tenants for, such as office buildings that have been decided to be demolished and are left vacant, by adding various added values. It concentrates on store development in the concentrated Tokyo city center where it can make use of the land experience and branch network cultivated in the central office building business, pursuing convenience with speed and flexibility of response.
(Author: FISCO Guest Analyst Ryoji Mogi)